Recreational Marijuana is Now Legal! … Sort of

by Lisa Talley | lisa@fresnoflyer.com

As of January 1st, medical and recreational (adult use) marijuana became legal in the state of California. Per the Prop 64 measure, adults over the age of 21 can now consume, purchase, possess, and grow cannabis without the fear of prosecution so long as they are within the regulation of the new law… and in accordance with any other policies put in place by the city in which they reside.

However, for any business looking to get into the marijuana industry gold rush, things are a little bit more complicated.

QUICK FACTS

The state of California now allows for adults over the age of 21 to possess up to 1 oz of marijuana for personal consumption. Each household (not person) may contain up to 6 plants. However, the rules of growing are likely to differ between cities. As a general rule, plants are to be grown indoors, and they should not be visible to others outside your household. Smoking in public is prohibited under the ballot measure of Prop 64 unless allowed by a local ordinance – in other words, don’t smoke it just anywhere, fines may occur.

Businesses may begin their application process with the Bureau of Cannabis Control in Sacramento so long as they have received a permit from the city they plan to operate in. Each municipality can determine their own rules and regulations as to how commercial cannabis will coexist in their communities, if at all. Cities still hold the final ruling on whether or not marijuana businesses can operate within their jurisdiction.

So, what does all this mean for Central Valley residents and entrepreneurs? The short version is, it’s murky – there are more questions than answers as of yet – however, the long version can help give insight as to what to expect in the coming months.

PERSONAL USE

Central Valley residents can lean on statewide rules regarding their right to consume, possess, and purchase cannabis. However, growing marijuana will come with some additional conditions that will vary according to the city of residence.

In an article by the Madera Tribune, it stated that Madera growers will need to obtain a permit from the city which will need to be displayed in plain view at the residence where the growing will occur. Failure to do so could result in a $1,000 fine per plant or possibly, per day. Renters who would like to grow in their residence would need written permission from their landlord before applying for a permit with the city.

Farmersville disallows growing outside which forces residents to grow indoors – this will also require a permit.

“Now residents will have to obtain a City-issued permit and inspection if they are going to grow marijuana inside. The mayor added the permit is meant to ensure that electrical component and lighting are up to code and that there is not any mold where they are growing it.” (Paul Myers, The Foothills Sun-Gazette)

At the time this article was written, no other city had yet to implement an ordinance surrounding personal growing. That said, no matter how a city decides to regulate growing in their area, it cannot take away an individual’s right to grow indoors.

Adults over 21 may also purchase cannabis and cannabis products from licensed retail outlets for recreational use. Patients who use medicinal marijuana may visit either a recreational or medical dispensary; however, medicinal marijuana will be exempt from paying the hefty (yet minimum) 15% sales tax.

“Proposition 64 would allow the state to impose a 15% excise tax on the retail sale of marijuana. Also, the state would be able to levy a cultivation tax on growers of $9.25 per ounce for flowers and $2.75 per ounce for leaves. The ballot measure also would let cities and counties to impose their own taxes to cover costs of services, including enforcement.” (Patrick McGreevy, Los Angeles Times)

Expect the price of cannabis to fluctuate from city to city, or from county to county. Although the cultivation tax only affects commercial growers, it’s likely that those costs will be passed down to the consumer.

However, locating a retail cannabis dispensary is going to be the real challenge.

WHERE TO BUY

As each city is in different stages of deciding how they’ll handle commercial marijuana, recreational dispensaries may not yet be either approved or available to consumers. Although adult use is now legal, finding a recreational dispensary will be difficult for Central Valley residents as many cities have moved to ban recreational operations, Fresno, Clovis, and Visalia among them.

Farmersville, Coalinga, Hanford, Merced, and Woodlake are the first cities, so far, to allow commercial marijuana operations for either manufacturing or sales, and in some instances, both.

“But Woodlake – a town of less than 8,000 people about 15 miles northeast of Visalia in Tulare County – has pushed forward at breakneck speed, going from idea to ordinance to the approval of two companies’ dispensary proposals in less than six months. City leaders hope to unlock a treasure trove of tax revenue, which can be used to beef up a thinning public service budget and attract customers to a blip on the map found well off the beaten path.” (Rory Appleton, The Fresno Bee)

Green Bean Pharm, formerly a medical cannabis delivery service only, is set to open their new recreational marijuana complex in February.

SETTING UP SHOP

While some cities have approved commercial operations, not all have OK’d recreational sales. If you’re looking to get into the game as a dispensary, you’ll need to start off with the understanding that your options will be limited.

Only Merced, Farmersville, and Woodlake have given the green light to recreational sales.

Those looking to jump in as growers or manufacturers can look to Coalinga who is still accepting permit applications. More information can be found at www.Coalinga.com under the ‘Business’ tab.

FRESNO – A JOURNEY FROM TOTAL BAN TO OPEN MIND

Fresno voted in the 12/14 City Council meeting 7-0 to begin the steps in allowing medical marijuana dispensaries within city limits along with cultivation, manufacturing, delivery, testing, and processing – all limited to medicinal purposes only.

The original text amendment included commercial operations open to both medical and recreational marijuana. After a tense debate from City Council and passionate testimonies from the public, City Council Member Steve Brandau motioned to revise the amendment to limit all commercial cannabis operations to that for medicinal purposes only, Garry Bredefeld seconded the motion. Council President, and co-sponsor of the amendment, Clint Olivier, declined the revision before ultimately voting ‘yes’ alongside the rest of the council.

The vote does not immediately translate to an open application process for those seeking a permit to open a dispensary, but rather to begin the conversation and research into creating the rules and regulations that will allow medical marijuana sales in the future. With the total ban in place, City Council would have been unable to approach the topic with any real meaning. At least with the new amendment, Fresno can move forward on deciding what medical marijuana operations could look like within city limits.

To help them draft the ordinances, the city has set aside a budget to hire a consulting firm to “sit with professional city staff, our professional city planners and determine how many dispensaries are needed by this community, where should they go, who should the operators be, [and] how we select the operators,” said Olivier during the 12/14 City Council meeting.

Both sides of the argument were present during the discussion as members of the public took to the dais. Law officials rebuked the statement made by pro-cannabis – that by allowing legal marijuana, the black market would disappear – arguing that the imposed taxes would raise costs significantly and drive those who could not afford legal cannabis back to the black market. However, they provided no counters to any claims made by the medical marijuana community which consisted of relief for symptoms of cancer, physical pain, anxiety, and insomnia to name a few. It is perhaps, the driving reason behind the City Council’s move to revisit the total ban.

It is what helped Fresno Police Chief, Jerry Dyer, change his tune on the topic of medical marijuana, after all.

“I do have mixed feelings about medical marijuana, I really do. And I can tell you that my feelings have changed over the years after listening to some of the stories that have been told here, from the individuals I’ve talked to and I do believe that there are individuals out there that have a legitimate need for medicinal marijuana [and] I support that, I really do,” he stated during the 12/14 City Council meeting.

However Dyer’s outlook has changed on medical cannabis, the Police Chief still firmly opposes recreational marijuana on all fronts.

It will likely be several months before Fresno sees any drafts on the regulating of how medical marijuana is commercially grown, cultivated, processed, manufactured, distributed, and sold within the city.

Expect more passionate City Council debates to follow as Fresno works to reconcile differences locally with County regulations and nationally, federal law still classifies marijuana as an illegal substance.

LEGAL – SORT OF…

Just days after California legalized pot, Attorney General, Jeff Sessions, decided to rescind the Obama-era policy that kept the federal government’s heavy hand out of states’ marijuana laws.

Still considered an illegal substance on the federal level, the Obama Administration’s policy allowed each state to decide for themselves on whether or not to legalize and regulate marijuana – generally barring federal law enforcement officials from interfering with sales in states where cannabis was legal.

“In 2013, President Barack Obama’s attorney general advised prosecutors not to waste money targeting pot growers and sellers that were abiding by state laws but to go after flagrant violations such as trafficking across state lines or selling to minors. Under this policy, several states legalized recreational pot, growers and sellers had begun to drop their guard over fears of a federal crackdown and the business blossomed into a sophisticated, multimillion-dollar industry feeding state government programs with tax dollars.”

(Brian Melley and Sadie Gurman, Associated Press)

With the shift in federal policy, some investors are skirting the cannabis industry by either choosing to wait out the storm or by leaving it altogether for fear of increased marijuana prosecutions. However, members of Congress – both Democrats and Republicans – are pushing back with the claim that the turnover not only violates states’ rights but it is also destructive and backward.

Sessions’ move also goes against the will of the people.

“According to a 2017 Gallup poll, 64 percent of Americans support legalizing cannabis for adult use, including a majority of Republicans. And a poll conducted by Marists indicates that 83 percent of Americans support legalizing cannabis for medical purposes.” (Eric Brakey, CNBC)

It’s unclear how the federal level decision will affect each of the states moving forward, but it’s clear that the marijuana industry won’t be fighting it alone.

So much remains ambiguous about the regulated future of legalized pot in California, even more so in the Central Valley. As some cities are still waiting to make their final decision, others have banned it outright, and Fresno is soon to embark on the unique challenge of writing new policies for medical marijuana businesses, from growing all the way to sales – but one thing is clear, and that it is going to make for a busy yet very interesting 2018.